New product, fuel prices may brighten port's future

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By Kevin Koelling, Managing Editor

Magnesium oxide diverted to Tell City shipping facility

TELL CITY - The Perry County Port Authority has taken on a new product and appears to be able to launch a project previously put on hold.

Magnesium oxide looks similar to charcoal briquettes and is used in blast furnaces and steel mills, explained Dick Neumann, who said the product should start moving through the port of Tell City in mid- or late July.

The vice president and chief executive officer for the port authority and Hoosier Southern Railroad said it will arrive by barge and depart by rail and will be the first product that will have arrived strictly by barge.

A product of China, Neumann expected to offload at least two barge-loads, which will fill approximately 30 rail cars. It's going to mills in northern Indiana, and had been transiting another river terminal in Illinois.

"We're anxiously awaiting it," Neumann said of the new business. "This is right up our alley. This is the niche that I see for the Perry County Port Authority, Tell City River Port and Hoosier Southern."

The port authority has been working to expand its market, and Neumann said a barge operator told the supplier about the Tell City port.

"I was encouraged to hear that," Neumann said.

Volumes of materials going through the port had been down on both the rail and river sides, Neumann told the board. He expected to see only three barges offload there this month, one of which had already come and gone.

Things may be looking up, however. "We're beginning to see some traffic returning to rail that was formerly going by truck," Neumann said. "We're seeing some scrap coming from origins we had not seen before, going to Waupaca."

A customer who had not used rail for approximately two years called him, he added, and may provide some business within 60 days. "

We ought to see some traffic coming back," the CEO explained. "Whether that's going to be ongoing or a spot move at this point, I don't know. Obviously the economy is very soft ... so I guess it could be worse, and I think as fuel prices continue to increase, we're going to see probably more interest in rail."

The Inland Rivers, Ports and Terminals trade association reports that a truck can transport a ton of cargo 59 miles on a gallon of fuel, a train can take it 202 miles, and a barge can move it 514 miles.

Hoosier Southern isn't the only railroad noticing an increase, Neumann said. "We'll just have to monitor and see if we can make the best of that and see where we can provide service."